Morgan County Judge Executive Tim Conley has been arrested on corruption charges.

Tim Conley, Judge Executive of Morgan County

The top elected official in an Appalachian county ravaged by a tornado nearly two years ago faces charges of mail fraud, theft and conspiring to launder money in an alleged scheme to steer work to a construction contractor in exchange for kickbacks.

An indictment against Morgan County Judge-Executive Tim Conley included a charge that he misused his position to ensure the contractor received excessive payments to clean up storm debris in the aftermath of the deadly tornado that hit the area March 2, 2012.

As the county's chief executive officer, Conley became the public face behind recovery efforts after the tornado leveled much of downtown West Liberty, the county seat, and damaged other areas. The storm killed six people in Morgan County, part of an outbreak of tornadoes that killed 25 people statewide.

The indictment unsealed Monday said the scheme between Conley and an owner of PBTHNOJJ Construction stretched from early 2009 to August of this year. The company was awarded contracts to build small bridges and culverts in the county.

Conley was arrested at his office in West Liberty, according to Mary Trotman, an FBI spokeswoman in Louisville. He was being held at a detention center in Lexington.

An attorney identified by Conley's office as his possible lawyer in the case did not immediately return a call. Online jail records did not list an attorney.

The indictment charged Conley with four counts of mail fraud and one count of theft from a program receiving federal funds. He was also charged with conspiring to launder money. Kenneth Lee Gambill, an owner and president of PBTHNOJJ Construction, based in Salyersville in eastern Kentucky, was indicted on the same counts.

Ruth L. Gambill, identified in the indictment as an owner and vice president of the company, also was charged with conspiring to launder money. The indictment did not say if the Gambills are related.

A call to a number listed in Kenneth Gambill's name was not immediately returned. The same number was listed for PBTHNOJJ Construction.

The indictment said the judge-executive opened bids in secret and altered PBTHNOJJ's bid prices to make it look as though it had submitted the lowest bids. Conley then secured approval from the county's fiscal court under those false pretenses.

As a result of the scheme, PBTHNOJJ got about $1.1 million in contracts with the county, it said.

Kenneth Gambill provided kickbacks to Conley, including an unspecified amount of cash derived from proceeds of the contracts, the indictment said.

Conley wielded considerable authority in the county's massive storm-recovery effort. The indictment alleged Conley misappropriated money from the county, which received large sums for emergency services, debris removal and rebuilding.

"Conley abused this position and authority to ensure that PBTHNOJJ Construction received payments in excess of the debris cleanup work actually performed," according to the indictment.

Gov. Steve Beshear and U.S. Rep. Hal Rogers previously announced state and federal authorities would send about $30 million for rebuilding efforts in Morgan County.

Several members of the county's fiscal court did not immediately return calls.

Conley is scheduled to be arraigned in federal court on Tuesday in Lexington. Kenneth Gambill has a court appearance set for Dec. 30. A date for Ruth Gambill to appear in court has not yet been scheduled.

The mail fraud and money laundering counts each carry a maximum penalty of 20 years in prison. The federal program fraud count carries a maximum penalty of 10 years in prison. The maximum fine for each count is $250,000.